Advantex Announces Fiscal 2019 Third Quarter Results

TORONTO, May 30, 2019 /CNW/ - Advantex Marketing International Inc. (CSE: ADX), a specialist in working capital and loyalty marketing products for merchants, announced its results for the three and nine months ended March  31, 2019.

Highlights of financial results.

		3 Months Ended March 31						9 Months Ended March 31
		2019			2018			2019			2018
		$			$			$			$
Revenues		$	1,387,652		$	1,652,757		$	5,046,639		$	5,637,092
	Direct expenses - Cost of cardholder rewards and marketing merchants to cardholders	319,066			431,618			1,060,689			1,458,466
	Direct expenses - Expense for provision against delinquent accounts	75,630			56,316			154,580			236,372
Gross profit		$	992,956		$	1,164,823		$	3,831,370		$	3,942,254
	Selling and General & Administrative	899,104			881,057			2,906,194			3,131,374
Earnings from operations before depreciation, amortization and interest		$	93,852		$	283,766		$	925,176		$	810,880
	Cash interest on loan payable and debentures	317,143			267,381			892,515			909,791
Earnings (loss) from operations before depreciation, amortization, non-cash interest on debentures (accretion charges) and restructuring bonus		$	(223,291)		$	16,385		$	32,661		$	(98,911)
	Depreciation and amortization	6,830			8,503			19,796			25,640
	Non-cash interest expense (accretion charges) and restructuring bonus related to debentures	136,754			131,955			409,315			138,757
(Loss) and Comprehensive (loss) before non-recurring item		$	(366,875)		$	(124,073)		$	(396,450)		$	(263,308)
	Gain on debt restructuring	$	-		$	-		$	-		$	1,795,103
Net profit/(loss) and Comprehensive profit/(loss)		$	(366,875)		$	(124,073)		$	(396,450)		$	1,531,795

The above tabulation is a non-GAAP presentation and is provided to assist readers in understanding Advantex's financial performance. The information is extracted from consolidated financial statements for the three and nine months ended March 31, 2019.

About Advantex:

Advantex provides working capital to merchants. Advantex also provides specialized marketing programs that enable members of affinity groups to earn frequent-flyer miles and other loyalty rewards through purchases at participating merchants.

Advantex shares trade on the Canadian Securities Exchange under the symbol ADX. For more information go to Advantex's profile on www.sedar.com

Advantex Marketing International Inc.
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)

	Note	At March 31, 2019			At June 30, 2018
		$			$
Assets
Current assets
Cash and cash equivalents		$	122,298		$	635,836
Accounts receivable		275,699			112,322
Transaction credits	5	9,303,565			5,592,426
Prepaid expenses and sundry assets		60,206			79,349
		$	9,761,768		$	6,419,933
Non-current assets
Property, plant and equipment		$	26,982		$	43,969
		$	26,982		$	43,969
Total assets		$	9,788,750		$	6,463,902
Liabilities
Current liabilities
Loan payable	6	$	8,096,307		$	4,427,390
Accounts payable and accrued liabilities		$	2,486,784		$	2,843,718
		$	10,583,091		$	7,271,108
Non-current liabilities
9% Non-convertibles debentures payable	7	$	4,957,266		$	4,547,951
		$	4,957,266		$	4,547,951
Shareholders' deficiency
Share capital	8	$	24,530,555		$	24,530,555
Contributed surplus		4,090,382			4,090,382
Accumulated other comprehensive loss		(47,383)			(47,383)
Deficit		(34,325,161)			(33,928,711)
Total deficiency		$	(5,751,607)		$	(5,355,157)
Total liabilities and deficiency		$	9,788,750		$	6,463,902

Economic/Financial dependence and Going Concern (note 2), Commitments and contingencies (note 11)
The accompanying notes are an integral part of these consolidated financial statements
Approved by the Board
Director: Signed	"William Polley"	Director: Signed	"Kelly Ambrose"
	William Polley		Kelly Ambrose

Advantex Marketing International Inc.
Consolidated Statements of Profit/(Loss) and Comprehensive Profit/(Loss) (unaudited)
For the three and nine months ended March 31, 2019 and 2018
(expressed in Canadian dollars)

	Note	Three months ended March 31						Nine months ended March 31
		2019			2018			2019			2018
		$			$			$			$
Revenues	14	$	1,387,652		$	1,652,757		$	5,046,639		$	5,637,092
Direct expenses	13/14	394,696			487,934			1,215,269			1,694,838
		992,956			1,164,823			3,831,370			3,942,254
Operating expenses
Selling and marketing	13/14	320,156			400,171			1,175,620			1,323,033
General and administrative	13/14	578,948			480,886			1,730,574			1,808,341
Earnings from operations before depreciation, amortization and interest		$	93,852		$	283,766		$	925,176		$	810,880
Interest expense:
Stated interest expense - loan payable, and debentures	6/7	317,143			267,381			892,515			909,791
Non-cash interest expense (accretion charges) and restructuring bonus related to debentures	7	136,754			131,955			409,315			138,757
		(360,045)			(115,570)			(376,654)			(237,668)
Depreciation of property, plant and equipment, and amortization of intangible assets		6,830			8,503			19,796			25,640
(Loss) and comprehensive (loss) before non-recurring item		$	(366,875)		$	(124,073)		$	(396,450)		$	(263,308)
Gain on debt restructuring	7	$	-		$	-		$	-		$	1,795,103
Net profit/(loss) and comprehensive profit/(loss)		$	(366,875)		$	(124,073)		$	(396,450)		$	1,531,795
Profit/(Loss) per share
Basic and Diluted	12	$	(0.00)		$	(0.00)		$	(0.00)		$	0.00

The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Changes in Shareholders' Deficiency (unaudited)
For the three and nine months ended March 31, 2019 and 2018
(expressed in Canadian dollars)

	Class A preference shares			Common shares			Contributed surplus			Accumulated other comprehen - sive loss			Deficit			Total
	$			$			$			$			$			$
Balance - July 1, 2017	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(35,153,009)		$	(6,579,455)
Net profit/(loss) and comprehensive profit/(loss)		-		-			-			-			1,531,795			1,531,795
Balance - March 31, 2018	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(33,621,214)		$	(5,047,660)
Balance - July 1, 2018	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(33,928,711)		$	(5,355,157)
Net profit/(loss) and comprehensive profit/(loss)		-		-			-			-			(396,450)			(396,450)
Balance - March 31, 2019	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(34,325,161)		$	(5,751,607)

The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Cash Flow (unaudited)
For the three and nine months ended March 31, 2019 and 2018
(expressed in Canadian dollars)

	Note	At March 31, 2019			At March 31, 2018
		$			$
Operational activities
Net profit/(loss) for the period		$	(396,450)		$	1,531,795
Adjustments for:
Depreciation of property, plant and equipment, and amortization of intangible assets		19,796			25,640
Accretion charge for debentures	7	222,932			70,734
Restructuring bonus for debentures	7	186,383			68,023
Non-cash portion of gain on debt restructuring		-			(1,283,611)
		32,661			412,581
Changes in items of working capital
Accounts receivable		(163,377)			(12,216)
Transaction credits		(3,711,139)			(466,685)
Inventory		-			16,978
Prepaid expenses and sundry assets		19,143			(408)
Accounts payable and accrued liabilities		(356,934)			(630,833)
		(4,212,307)			(1,093,164)
Net cash provided by (used in) operating activities		$	(4,179,646)		$	(680,583)
Investing activities
Purchase of Property, plant & equipment		$	(2,809)		$	(2,344)
Net cash (used in) investing activities		$	(2,809)		$	(2,344)
Financing activities
Proceeds - 9% Non-convertible debentures payable	7	$	-		$	400,000
Proceeds -  Loan payable	6	3,668,917			260,198
Net cash generated from / (used in) financing activities		$	3,668,917		$	660,198
(Decrease) in cash and cash equivalents during the period		$	(513,538)		$	(22,729)
Cash and cash equivalents at beginning of period		635,836			367,357
Cash and cash equivalents at end of period		$	122,298		$	344,628
Additional information
Interest paid		$	766,969		$	474,097
For purposes of the cash flow statement, cash comprises
Cash		$	122,298		$	344,628
The accompanying notes are an integral part of these consolidated financial statements

SOURCE Advantex Marketing International Inc.

For further information: Mukesh Sabharwal, Vice-President and Chief Financial Officer, Tel: [phone] ext. 249, Email: [e-mail]

Related Links

http://www.advantex.com